Comparing Banco Santander (NYSE:SAN) and China Construction Bank (OTCMKTS:CICHY)

Banco Santander (NYSE:SAN) and China Construction Bank (OTCMKTS:CICHY) are both large-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.

Risk and Volatility

Banco Santander has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, China Construction Bank has a beta of 0.19, meaning that its share price is 81% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Banco Santander and China Construction Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Santander	0	1	2	1	3.00
China Construction Bank	0	0	0	0	0.00

Dividends

Banco Santander pays an annual dividend of $0.18 per share and has a dividend yield of 2.1%. China Construction Bank pays an annual dividend of $0.88 per share and has a dividend yield of 4.3%. Banco Santander pays out 20.0% of its earnings in the form of a dividend. China Construction Bank pays out 24.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Insider & Institutional Ownership

9.2% of Banco Santander shares are owned by institutional investors. 9.5% of Banco Santander shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Banco Santander and China Construction Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banco Santander	$66.96 billion	1.94	$13.61 billion	$0.90	9.68
China Construction Bank	$188.88 billion	1.35	$46.68 billion	$3.58	5.68

China Construction Bank has higher revenue and earnings than Banco Santander. China Construction Bank is trading at a lower price-to-earnings ratio than Banco Santander, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Banco Santander and China Construction Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco Santander	17.30%	11.98%	0.71%
China Construction Bank	24.85%	10.11%	0.81%

Summary

Banco Santander beats China Construction Bank on 10 of the 16 factors compared between the two stocks.

About Banco Santander

Banco Santander, S.A. provides various financial services worldwide. The company operates through Retail Banking, Santander Corporate & Investment Banking, Wealth Management & Insurance, and PagoNxt segments. It offers demand and time deposits, mutual funds, and current and savings accounts; mortgages, consumer finance, loans, and various financing solutions; and project finance, debt capital markets, global transaction banking, and corporate finance services. The company also provides asset management and private banking services; and insurance products. In addition, it offers corporate and investment banking services; and digital payment solutions. Further, it offers online banking and financial services to retail, business, institutional, corporate, private banking and university customers and clients. The company was formerly known as Banco Santander Central Hispano SA and changed its name to Banco Santander, S.A. in February 2007. Banco Santander, S.A. was founded in 1856 and is headquartered in Madrid, Spain.

About China Construction Bank

China Construction Bank Corporation provides various banking and related financial services to individuals and corporate customers in the People's Republic of China and internationally. It operates through Corporate Finance Business, Personal Finance Business, Treasury and Asset Management Business, and Others segments. The company accepts various deposits, such as foreign currency, all in one accounts, RMB, corporate term and notification, and corporate demand deposits, as well corporate deposits by agreement. Its loan products include personal business, car, and housing loans; and SME, traditional credit, commercial draft, buyer credit, and RMB credit line loans. The company also offers credit cards; physical gold for personal investment and personal gold accounts; foreign exchange services; certificate treasury and savings bonds, securities deposit accounts, and securities services, as well as bank-securities transfer and book-entry treasury bond over the counter transaction services; and wealth management products. In addition, it provides collection, salaries payment, third-party collection and payment, insurance agency, and remittance services; international settlement and financing, and FI services; securities and fund settlement services; guarantee-based, consulting and advising, and factoring services; fund custody services; and e-banking services. Further, the company offers institutional services comprising services for government agencies, social security, banks cooperation, bank-securities cooperation, bank-insurance cooperation, and services for non-banking financial institutions. China Construction Bank Corporation was founded in 1954 and is headquartered in Beijing, the People's Republic of China.